Uber Technologies revolutionized the transportation industry with its powerful and sophisticated software, but apparently couldn’t figure out how to properly collect and pay road tolls for some of its drivers.
The ride-hailing service is refunding 336 Massachusetts drivers more than $210,000 for failing to, in a timely manner, process electronic tolls it collected and remitted on their behalf. A settlement announced by Massachusetts Attorney General Maura Healey requires an Uber subsidiary, Xchange Leasing, to pay the drivers, on average around $625.
The issue was related to drivers who lease their vehicles through Xchange Leasing, especially those who do not have E-ZPass transponders.
Under the state’s electronic tolling system, drivers without an E-ZPass are charged based on their license plate numbers. But because Uber owns the leased vehicles, it paid the tolls and took the fee out of drivers’ paychecks — including the late fees the company had incurred, Healey said.
Uber acknowledged Xchange and a contractor “fell behind on processing citations and tolls,” resulting in tolls not being remitted on time and drivers being assessed late fees. Those drivers were also not told of the late fees, Healey’s office said.
“This was our mistake, and we are making it right” by refunding drivers and ensuring it has properly paid all Massachusetts tolls, Uber said. Additionally, the company has put new processes in place to prevent the issue from happening again.
As part of the settlement, Uber refunded every potentially affected driver for all toll charges, plus a 20 percent bonus, rather than reviewing toll histories and refunding specific improper charges. The company is also paying $40,000 to consumer programs in the attorney general’s office.
The settlement comes as Uber is trying to improve its corporate image on multiple fronts. Drivers have long complained about fares, compensation, and employment status. Tensions heightened earlier this year when former chief executive Travis Kalanick was caught on video berating a driver for complaining about fares. Uber also recently agreed to pay New York drivers tens of millions of dollars for miscalculating wages.
The company has introduced new features meant to improve conditions for drivers, highlighted by the addition of a tipping function that Uber had resisted for years.
And following several corporate scandals and Kalanick’s resignation in June, Uber this week announced it has hired former Expedia chief executive Dara Khosrowshahi to be its next leader.
Meanwhile, the state’s Department of Public Utilities is preparing to introduce new regulations this fall for ride-hail companies and their drivers, which include requirements that drivers pay commercial tolls while providing rides. Uber and other ride-hail companies will be charged with ensuring the drivers are being tolled at the proper rate.Adam Vaccaro can be reached at email@example.com. Follow him on Twitter at @adamtvaccaro.